Consumer Watchdog has posted 181 diaries on Daily Kos since 2010. These diaries are almost always dump-and-run jobs with very rare interaction. It is obvious that their diaries are professionally written PR pieces which pull at the heartstrings or appeal to one's sense of fairness and social justice.
Their recent diary attacking Planned Parenthood ("I Support Planned Parenthood, Why Isn't Planned Parenthood Supporting Women?") was so controversial that it caused many Kossacks to start asking questions about this organization. As a result, a new Group has formed called Consumer Watchdog is Neither and this diary is the second installment on our inquiry.
The first diary was called Consumer Watchdog Peddles its Wares on DK, but Are They Legit?" Questions were raised about the lack of transparency in Consumer Watchdog's financing, their very ample income from lobbying and their lucrative service as "intervenors" before the State of California on insurance matters. The picture is muddled to say the least.
So follow me below the orange doodad as we try to "unmuddle" the picture and shine a bit of light on Consumer Watchdog. The ultimate questions are "What are they doing here? Are they spamming us with PR that has been paid for by unnamed parties? Are they working in their own self interest or are they working for some higher purpose? Should we welcome such users and provide them with an audience for their work? Are we being played?"
Consumer Watchdog got its start with the campaign for insurance regulation (Prop 103) in California. Harvey Rosenfield, the founder, is a former colleague of Ralph Nader who has worked on various topics such as campaign finance and nuclear proliferation. Rosenfield's portfolio of causes reads like a progressive's perfect wish-list. Clearly, this is an outfit that fights for the little guy and stands up to big intrusive government and predatory corporations. When you read about their work, you want to stand up and cheer.
One of the reasons Consumer Watchdog has become a magnet for criticism is that they receive millions of dollars in "intervenor fees," which are fees that they charge for intervening in insurance rate reviews before California's Insurance Commission. The intervenor provision was written into Prop 103 by Consumer Watchdog and they have been profiting from it very handsomely ever since. According to one of their most vocal detractors, Steven Maviglio of Consumerwatchdogwatch.com, Consumer Watchdog "rakes in millions of dollars for itself from a self-serving "intervenor fee" provision it inserted into a ballot initiative."
The California Department of Insurance estimates that 70% of all intervenor compensation goes to Consumer Watchdog. In 2012, Consumer Watchdog was the only intervenor to receive any payments and these were substantial: $779,812.75.
A year-by-year accounting of the intervenor fees paid to Consumer Watchdog and others can be found here.
They are presently at work on another ballot proposition which will do to health insurance what they did for homeowners and car insurance and at the same time carve out a new hunk of lucrative business for themselves as "intervenors."
A consumer group that has reaped millions of dollars in fees from insurance companies thanks to a state initiative it wrote is facing a new wave of criticism from Democratic and Republican political consultants and lawmakers.So why does this matter? After all, if you believe Consumer Watchdog, Prop 103 has
Critics note that the advocacy group, Consumer Watchdog, profits from the special insurance regulation process it not only created, but dominates. The consultants argue that the group is trying once again to use a ballot initiative to generate more revenue.
saved consumers billions of dollars since it was passed in 2003. It should also be noted that the California Department of Insurance views the intervenor process as very valuable.
But here is a question for pondering: Is it proper to be skeptical of an organization that advocates for a ballot measure when said organization stands to profit handsomely from said measure? Does this detract from the credibility of Consumer Watchdog when they post diaries here? Some of their advocacy is for legislation that is not connected to "intervenor" fees, but is supported by various groups and donors who often remain anonymous. We will be looking at this troublesome aspect in the future, for sure. We will also be looking at some of the generous incomes of Consumer Watchdog staff.
Who was that sage person who said "Follow the money?"